MBA Salary Negotiation

Salary NegotiationAlways Ask For More… Right? When is the right time to start negotiating the amount of an offer? And no matter what it is… it’s always better to ask for more… Isn’t it?

One of the most common questions I come across from Job Seekers is how, and when, to negotiate an offer. As part of a Job Networking group, each time we present a topic on “Compensation Strategies” it becomes one of the best attended sessions. There seem to be many misconceptions of the process, and often one of the most poorly handled parts of getting a job.

One of the best things you can do, long before you get an offer, is to write out for yourself your criteria for an offer. Salary is important, and more always feels better, however, often other things might be of more value to you than another $2,000 in salary. If you determine your “must haves” before you receive an offer, you’ll be able to make a much more rational and objective decision.

Rank a number of factors in their importance to you (A, B, or C):

  • Salary
  • Incentive pay
  • Stock Options
  • Amount of paid time off
  • Tuition or training assistance
  • 401(k) contributions and vesting
  • Pension
  • Health Plan coverage and costs
  • Short and Long term disability insurance
  • Life Insurance
  • Child care assistance
  • Health Club or Country Club Membership
  • Expense account
  • Administrative assistance
  • Ability to work from home full-time or part-time
  • Office environment

Also, be aware of your real “salary range” when asked earlier in the interview process. Often people don’t really know what their bottom line is, and state something on the low end that they are really not in a position to accept. If you stated a range of $70,000 to $80,000; they present an offer of $72,000, and you then say it’s too low to accept, they question your credibility since that’s within the range you gave them.

My experience has been that most companies want to present an offer that makes the candidate feel good about accepting and coming to work at that company. It’s very rare that I’ve truly seen a company try to “low ball” an offer because they think they can grab someone “on the cheap”. Many candidates seem to think that the company is always trying to see how cheap they can get them. I don’t believe that’s true. There may be other reasons, like a fixed salary grade for a given position that forces the company to make an offer that’s lower than the candidate is seeking, but usually not because they are intentionally trying to under pay what a candidate is worth.

Conversely, candidates that try to negotiate for more, even when the offer was in their stated range, appear as if they are trying to suck out of the company anything they can. They may get it, but then show up for work with their manager looking at them with an attitude of “OK hotshot, you better prove that you’re worth it!” Not the most productive way to start a new job!

Here are a number of points to consider regarding an offer:

  • Don’t start negotiating an offer prior to receiving one, except for answering specific questions they may ask. It’s presumptive and may hurt your chances of actually receiving an offer at all.
  • Always ask to consider an offer overnight. No matter how good it is, take time to evaluate the entire offer (Salary, benefits, position, etc.). It is not reasonable, in most cases, to ask for more than a day before giving an answer. If you are going to turn it down, they want to be able to pursue the next candidate ASAP. They deserve a timely answer.
  • Don’t negotiate unless you are prepared to accept the offer if they agree to what you are asking. Having them consider a change, and agree, and then still turn it down will burn a bridge you may need in the future.
  • If you have a competing offer that is higher, that is a good reason to negotiate. HOWEVER, don’t use it if you won’t accept even if they beat it, and NEVER make one up. It’s morally and ethically wrong, and they may refuse to counter offer, then it becomes very difficult to accept the original.
  • Never ask for more money using personal reasons (i.e. “I can’t make my house payments on that salary”). Always use objective reasons that matter to them (i.e. “Based on salary surveys I’ve seen for this level of position…” or “Based on the level of experience I’ve gained in my career…”).
  • What appears to be a great salary offer, may be offset by a poor benefits package, or not enough vacation time, or many other factors. Consider the entire offer and compare it to the criteria you wrote out ahead of time. How does it match your priorities?
  • If the salary is low and they can’t raise it, but you want the job… ask for other concessions that have a direct impact on your wallet… i.e. more vacation, more tuition reimbursement or additional training, club membership, stock options, bonuses, paid parking, early salary review, expanded expense reimbursement, etc.
  • If there are multiple points you want to negotiate, let them know that and then start with the “big” ones first. Ask for the salary increase before you ask for parking reimbursement. If you ask for the small ones first, they agree, and then you lay a big one on them it creates a very awkward discussion.
  • Keep a win-win attitude in your negotiation. You want to start a job feeling good about the offer. The company wants an employee that feels good but is paid fairly in their view and structure.

“Always go for more” is usually not a good approach. If the offer is acceptable, it’s often best to take it or leave it based on the overall picture.

Often, the best route to a great offer, is to make your value clear in the interview process!

This information was written by Harry Urschel of e-Executives and The Wise Job Search and provided to you by MBA Highway. We hope you have found it useful to your job search and career development.

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